Q2 2025 Industrial Logistics Properties Trust Earnings Call

Conference Operator: Good morning and welcome to Industrial Logistics Properties Trust's second quarter 2025 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Matt Murphy, manager of investor relations. Please go ahead.

Good morning and welcome to Industrial Logistics Properties Trust.

Second quarter, 2025 Financial results conference call. All participants will be in listen-only mode. Should you need assistance? Please signal a conference specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions to ask a question. You may press star then 1 on your telephone keypad to withdraw your question. Please press star then 2. Please note. This event is being recorded. I would now like to turn the conference over to Matt Murphy manager of

Investor relations. Please go ahead.

Matt Murphy: Good morning. Joining me on today's call are ILPT's president and chief operating officer, Yael Duffy, chief financial officer and treasurer, Tiffany Sy, and vice president, Marc Krohn. In just a moment, they will provide details about our business and our performance for the second quarter of 2025, followed by a question and answer session with sell-side analysts. Please note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on ILPT's beliefs and expectations as of today, July 30th, 2025, and actual results may differ materially from those that we project.

Good morning.

Joining me on today's call are ilpt president and Chief Operating Officer yle. Duffy Chief Financial Officer and Treasurer Tiffany sigh and vice president Marc Cohn.

In just a moment, they will provide details about our business and our performance for the second quarter of 2025, followed by a question and answer session with Southside analysts.

Please note that the recording and retransmission of today's conference call is prohibited with the prior written consent of the company.

Also note that today's conference call contains forward-looking statements within the meaning of the private Securities. Litigation Reform, Act of 1995 and other Securities laws.

Matt Murphy: The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be accessed from our website, ilptree.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non-GAAP financial measures during this call, including normalized funds from operations, or normalized FFO, adjusted EBITDA-RE, net operating income, or NOI, and cash basis NOI. A reconciliation of these non-GAAP measures to net income is available in our financial results package, which can be found on our website. I will now turn the call over to Yael.

These beliefs and expectations as of today, July 30th 2025 and actual results. May differ materially from those that we project

the company undertakes, no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call.

Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be accessed from our website. PT reed.com

Investors are cautioned not to place. Undue Reliance upon any forward-looking statements.

In addition, we will be discussing non-GAAP financial measures during this call, including normalized funds from operations, or normalized FFO.

Adjusted. Evita

Net Operating Income or NOI and cash basis. NOI.

A Reconciliation of these non-gaap measures to net. Income is available in our financial results package which can be found on our website.

Yael Duffy: Thank you, Matt, and good morning. Before we begin, I want to acknowledge the reports of a tsunami warning issued for Hawaii last night. Fortunately, the warning has since been lifted, and early assessments suggest there was no significant flooding. We currently expect little to no impact to our tenants or properties. ILPT reported another strong quarter and made significant progress in improving its balance sheet and positioning the company for future growth. Cash basis NOI grew by 2.1% compared to the same period last year, and normalized FFO increased 54% year over year. We made notable progress on our strategic priorities this quarter. First, American Tire, our fourth largest tenant, emerged from bankruptcy proceedings in May without terminating or modifying any of its five leases with us and thereby securing $7.5 million in annualized revenue through 2029.

I will now turn the call over to Yale.

Thank you Matt. Good morning before we begin. I want to acknowledge the reports of a tsunami warning issued for Hawaii last night. Fortunately the warning has since been listed in early assessments suggests. There was no significant flooding.

We currently expect little to no impact to our tenants or properties.

Ilpt reported another strong quarter and made significant progress in improving, its balance sheet in positioning the company for future growth.

Cash basis. Noi grew by 2.1% compared to the same period last year and normalize ffo. Increased 54% year-over-year.

Yael Duffy: Second, in June, we successfully refinanced our $1.235 billion of floating rate debt into $1.16 billion of fixed rate debt. And lastly, earlier this month, we announced a material increase of our quarterly dividend from $0.01 per share to $0.05. As of June 30th, 2025, ILPT's portfolio consisted of 411 distribution and logistics properties across 39 states, totaling 60 million square feet, with a weighted average lease term of 7.6 years. Our well-diversified portfolio is further highlighted by our unique Hawaii footprint consisting of 226 properties totaling 16.7 million square feet. More than 76% of our annualized revenues come from investment-grade rated tenants or from our secure Hawaii leases.

We made notable progress on our strategic priorities. This quarter first American Tire, our fourth largest tenant emerged from bankruptcy proceedings in May without terminating or modifying any of its 5 leases with us. And thereby securing 7 and a half million dollars in annualized Revenue through 2029.

In June, we successfully refinanced our $1.235 billion of floating rate debt into $1.16 billion of fixed rate debt.

And lastly earlier this month, we announced a material increase of our quarterly dividends from 1 cent per share to 5 cents.

As of June 30, 2025, IOT's portfolio consisted of 411 distribution and logistics properties across 39 states, totaling 60 million square feet, with a weighted average lease term of 7.6 years.

Our well Diversified portfolio is further highlighted by our unique Hawaii footprint. Consisting of 226 properties totaling 16.7 million square ft.

Yael Duffy: Following a robust first quarter in which we executed 2.3 million square feet of leasing, second quarter activity totals 171,000 square feet at a weighted average lease term of 4.8 years and at weighted average rental rates that were 21.1% higher than prior rental rates for the same space. More importantly, leasing activity year to date is expected to increase ILPT's annualized rental revenue by approximately $3.2 million, of which one-third has yet to be realized. Marc will provide further details on our leasing activity and pipeline shortly. Turning to our goals for the second half of the year, we remain focused on evaluating opportunities to improve our balance sheet and reduce leverage. Accordingly, as part of our recent refinancing, it was important that we were able to successfully negotiate improved terms to release properties under the new loan provision.

more than 76% of our annualized revenues, come from investment grade rated tennis or from our secure Hawaii, leases

Following a robust first quarter in which we executed 2.3 million square ft of leasing second quarter activity, totals 171,000 square feet at a weighted average lease term of 4.8 years. And at weighted average rental rates that were 21.1% higher than prior rental rates for the same space.

More importantly, leasing activities year-to-date are expected to increase IEL's annualized rental revenue by approximately $3.2 million.

Of which 1/3 has yet to be realized.

Marc will provide further details on our leasing activity and pipeline shortly.

Yael Duffy: By doing so, we'll have greater flexibility as we evaluate potential asset sales to enhance liquidity and support our broader capital strategy. That being said, we continue to believe in the strength of our properties and will remain disciplined when considering future sales to ensure that we maximize value. To that end, through an unsolicited offer from an owner-user, one property was classified as held for sale at quarter end at what we believe is an attractive valuation of $50 million. A portion of the proceeds from this potential sale will be used to partially repay ILPT's $700 million fixed rate mortgage loan, which comes due in 2032. We anticipate a close in late 2025 or early 2026 and look forward to updating you on our progress on future calls.

Turning to our goals for the second half of the year. We remain focused on evaluating opportunities to improve our balance sheet and reduce leverage accordingly. As part of our recent refinancing, it was important that we were able to successfully negotiate improved terms to release properties under the new loan, provisions,

By doing so, we'll have greater flexibility as we evaluate potential asset sales to enhance liquidity and support our broader capital strategy.

That being said, we continue to believe in the strength of our properties and will remain disciplined when considering future sales to ensure that we maximize value.

A portion of the proceeds from this potential sale will be used to partially repay. Iot's, 700 million, fixed rate mortgage loan which comes due in 2032.

Yael Duffy: Additionally, we are closely monitoring the capital markets to evaluate opportunities to refinance our consolidated joint venture's $1.4 billion of debt. This loan matures in March 2026 and has one remaining one-year extension option, which provides us continued flexibility as we evaluate our options. Lastly, we remain committed to driving value by executing new and renewal leasing with strong economics through the second half of the year. The growth of our leasing pipeline is a testament to ILPT's portfolio of high-quality assets and diversified tenant roster. While ongoing macroeconomic uncertainty may ultimately delay tenant decision-making or hinder leasing velocity, we have not seen any weakening demand within our portfolio. We believe ILPT remains well-positioned to navigate the current market conditions and capitalize on the long-term fundamentals of our industry. I will now turn the call over to Marc.

We anticipate a close in late 2025 or early 2026 and look forward to updating you on our progress. On future calls,

Additionally, we are closely monitoring the capital markets to evaluate opportunities to refinance. Our Consolidated joint ventures, 1.4 billion dollars of debt.

This loan matures in March 2026 and has won remaining 1 year extension option. Which provides us continued flexibility as we evaluate our options.

Lastly, we remain committed to driving value by executing new and renewal leasing with strong economics through the second half of the year.

The growth of our leasing pipeline is a testament to iot's portfolio of high-quality assets and diversify tenant roster.

While ongoing macroeconomic uncertainty May ultimately delay, tenant decision-making, or hinder leasing velocity? We have not seen any weakening demand within our portfolio.

Marc Krohn: Thank you, Yael, and good morning. ILPT ended the quarter with occupancy of 94.3%, which exceeded the national industrial average by 170 basis points. We executed 171,000 square feet of leasing during the quarter, which was primarily related to renewals and achieved with minimal concessions. Over the last four quarters, we have completed nearly 6 million square feet of leasing across 57 transactions. As a result, only 2.1 million square feet, or 3.6% of our leased square footage, is set to expire in the next 12 months. As we have shared in prior quarters, we typically begin renewal discussions at least 18 to 24 months ahead of lease expiration. We believe this proactive approach and early engagement helps drive tenant retention and reduces potential downtime. These principles, along with a tenant retention rate of 86%, underscore our ability to maintain portfolio stability.

We Believe ilpt remains. Well, positioned to navigate the current market conditions and capitalize on the long-term fundamentals of our industry. I will now turn the call over to mark.

Thank you, y'all and good morning, ilpt ended. The quarter with occupancy of 94.3%, which exceeded the national Industrial Average by 170 basis points.

We executed 171,000 square feet of leasing during the quarter which was primarily related to renewals and achieved with minimal concessions.

Over the last 4 quarters, we have completed nearly 6 million square feet of leasing across 57 transactions.

As a result, only 2.1 million square feet, or 3.6%, of our leased square footage is set to expire in the next 12 months.

As we have shared in Prior quarters, we typically begin renewal discussions, at least 18 to 24 months ahead of lease expiration.

Marc Krohn: Today, our leasing pipeline totals 7.8 million square feet, with more than half of the activity related to renewal discussions for leases that expire in 2026 and 2027. Through active conversations with tenants, most are choosing to renew versus relocate given the cost of move, business disruption, and economic uncertainty. Additionally, our tenants continue to invest their own capital into our properties, leading to a higher renewal probability. Furthermore, our leasing pipeline could result in positive net absorption of 3 million square feet, including early-stage prospects for our vacancies in Hawaii and Indiana. We expect these leases will yield average roll-ups in rent of 20% on the mainland and 30% in Hawaii, further illustrating the strength of our portfolio and our ability to generate organic cash flow growth.

We believe this proactive approach in early engagement helps Drive tenant retention and reduces potential downtime. These principles, along with a tenant retention rate of 86%. Underscore. Our ability to maintain portfolio, stability.

Today, our leasing pipeline total 7.8 million square ft with more, than half of the activity related to Renewal discussions for leases that expire in 2026 and 2027.

Through active conversations with tenants most are choosing to renew versus relocate. Given the cost to move business, disruption and economic uncertainty. Additionally, our tenants continue to invest their own Capital into our properties leading to a higher renewal probability.

Marc Krohn: Our team remains focused on driving rent spreads, maintaining high tenant retention, and advancing the active pipeline to conversion in the second half of the year. I will now turn the call over to Tiffany.

Furthermore, our leasing pipeline could result in positive net, absorption of 3, million square feet, including early stage prospects, for our vacancies, in Hawaii and Indiana. We expect these leases will yield average Roll-Ups, and rent of 20% on the mainland, and 30% in Hawaii. Further illustrating the strength of our portfolio and our ability to generate organic cash flow growth.

Tiffany Sy: Thank you, Marc. Good morning, everyone. Before I cover our second quarter results, I'd like to provide more detail on the refinancing that Yael mentioned earlier. Using cash on hand of $75 million, we refinanced our $1.235 billion floating rate loan into a new $1.16 billion fixed rate loan. The new loan requires interest-only payments and matures in 2030. By reducing the outstanding principal balance, eliminating the need to purchase interest rate caps, and reducing our interest rate from 6.7% to 6.4%, we expect our annual cash savings to be approximately $8.5 million, or $0.13 per share. As a result, earlier this month, we announced that our board has raised the quarterly dividend from $0.01 to $0.05, or $0.20 per share annually.

Our team remains focused on driving rent spreads maintaining High tenant retention and advancing the active pipeline to conversion in the second half of the year. I will now turn the call over to tip.

Thank you, Mark. Good morning, everyone.

Before I cover our second quarter results, I'd like to provide more details on the refinancing that you all mentioned earlier.

Using cash on hand of $75 million, we refinanced our $1.235 billion floating rate loan into a new $1.16 billion fixed rate loan.

The new loan requires interest-only payments and matures in 2030.

By reducing the outstanding, principal balance eliminating, the need to purchase interest rate, caps, and reducing our interest rate from 6.7% to 6.4%. We expect our annual cash savings to be approximately 8.5 million or 13 cents per share.

As a result earlier this month, we announced that our board has raised the quarterly dividend from 1 cent to 5 cents.

Tiffany Sy: Now turning to our second quarter results, last night we reported normalized FFO of $13.8 million, or $0.21 per share, which was at the high end of our guidance and represents an increase of 54% compared to the same quarter a year ago. NOI was $87.6 million, and cash basis NOI was $84.7 million, each representing increases on both a year-over-year and sequential quarter basis, while adjusted EBITDA-RE remained relatively flat at $85 million. Interest expense decreased by $1.9 million compared to the first quarter of 2025 to $67.9 million, reflecting the impact of our lower cost interest rate cap that our consolidated joint venture purchased in March. We expect third-quarter interest expense to decline to approximately $63.5 million, with $58.5 million of cash interest expense and $5 million of non-cash amortization of financing and interest rate cap costs.

now, turning to our second quarter results,

last night, we reported normalized, ffo of 13.8 million or 21 cents per share.

Which was at the high end of our guidance and represents an increase of 54% compared to the same quarter a year ago.

Noi was 87.6 million and cash basis. Noi was 84.7 Million. Each representing increases on both a year-over-year and sequential quarter basis while adjusted IBA re remained relatively flat at 85 million.

Interest expense decreased by 1.9 million. Compared to the first quarter of 2025 to 67.9 million reflecting the impact of our lower costs interest rate cap that our Consolidated joint venture purchased in March.

Tiffany Sy: Turning to our balance sheet, we ended the quarter with cash on hand of nearly $60 million and restricted cash of just over $100 million. Our net debt to total assets ratio increased slightly to 69.9%, and our net debt coverage ratio remained relatively unchanged at 12 times. As a result of the refinancing, our variable debt to net debt ratio declined from 64.8% as of March 31st to 34.4% at June 30th, and our interest coverage ratio increased from 1.2 times to 1.3 times. All of our debt is fixed with no maturities until 2029, except for our consolidated joint venture's $1.4 billion floating rate loan. This loan is fixed through an interest rate cap and, including its remaining extension option, is due in 2027. As a reminder, this loan is prepayable with no penalties at any time through its maturity.

We expect their quarter interest expense to decline to approximately 63.5 million with 58.5 million of cash interest expense and 5 million dollars of non-cash. Amortization of financing and interest rate cap costs.

Turning to our balance sheet.

We ended the quarter with cash on hand of nearly $60 million and restricted cash at just over 100 million dollars.

Our net debt to total assets ratio increased slightly to 69.9%, and our net debt coverage ratio remained relatively unchanged at 12 times.

As a result of the refinancing, our variable debt to net debt, ratio declined, from 64.8% as of March, 31st to 34.4% at June 30th and our interest coverage ratio increased from 1.2 times to 1.3 times.

All of our debt is fixed with no maturity until 2029, except for our consolidated joint ventures, $1.4 billion in floating rate loans.

This loan is fixed through an interest rate cap and includes its remaining extension. The option is due in 2027.

Tiffany Sy: Looking ahead, based on ILPT's leasing activity and the interest expense savings from our refinancing, we expect normalized FFO for the third quarter of 2025 to be between $0.25 and $0.27 per share. In closing, ILPT is actively making strides to strengthen its balance sheet and continues to benefit from demand for its high-quality industrial real estate. We believe the increased dividend strikes the right balance between delivering returns for our shareholders while maintaining sufficient capital to support our operations and continued deleveraging strategies. That concludes our prepared remarks. Operator, please open the lines for questions.

As a reminder, this loan is pre-payable with no penalties at any time through its maturity.

Looking ahead based on iot's, leasing activity and the interest expense savings from our refinancing. We expect normalized ffo for the third quarter of 2025 to be between 25 and 27 cents per share.

In closing, IOT is actively making strides to strengthen its balance sheet and continue to benefit from demand for its high-quality industrial real estate.

We believe the increased dividend strikes the right balance between delivering returns for our shareholders while maintaining sufficient capital to support our operations and continued deleveraging strategies.

That concludes our prepared remarks operator, please open the line for questions.

Conference Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Mitch Germain with Citizens Capital Markets. Please go ahead.

We will now begin the question and answer session.

To ask a question. You may press star then 1 on your telephone keypad. If you're using a speaker-phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star. Then 2 at this time we will pause momentarily to assemble our roster.

The first question comes from Mitch Germaine with Citizens Capital Markets. Please go ahead.

Jordi (for Mitch Germain): Hi, this is Mitch. This is Jordi on for Mitch. Just starting with your question, thank you for providing all the details. I wanted to ask if there are any one-timers in the earnings this quarter, like a lease term fee or something on those lines?

Hi. This is Mitch. Uh, this is Jordi on the match, uh just uh, starting with a few questions there. Thank you for providing all the uh details. I wanted to ask if there. Any 1 timers in the earnings this quarter like at least 10 for you or something on those lines.

Tiffany Sy: We had one $750,000 remediation payment related to a scheduled termination of a lease. That's it.

Jordi (for Mitch Germain): Okay. Got it. Thank you. And congratulations on the refi. So are you right now in discussions or looking forward to refining the $1.4 billion JV debt as well?

We had 1 uh 750,000 uh remediation payment related to a scheduled um termination of of a lease. Uh, that's it.

Okay. Got it. Thank you. Um, and congratulations on the refi. So uh, are you right now in discussions or looking forward to refine the 1.4 billion JV data as well?

Tiffany Sy: We are actively evaluating options that are available to us.

We are actively evaluating options that are available to us.

Jordi (for Mitch Germain): Okay. Got it. And the last one for me here is that you mentioned one of the properties held for sale. Should we expect more on those lines in the coming quarters?

Okay, got it. Uh, and the last 1 for me here is that, uh, you mentioned, uh, 1 of the properties held for sale? Should we expect more on those lines in the coming quarters?

Yael Duffy: We don't have anything else in the works right now, but we are evaluating opportunities. And so I would, you know, I could foreshadow that in the second half of the year or early 2026, there might be some additional properties that we bring to market or consider for disposition.

Jordi (for Mitch Germain): Got it. Congratulations, Michael. That's all for me. Thank you.

We don't have anything else um, in the works right now but we are evaluating um, opportunities. And so I would, you know, I could foreshadow that in the second half of the year or early 2026. There might be some additional properties that we bring to market for consider for disposition.

Mitch Germain: Thank you.

Got it. Uh, congratulations, my caller. That's all from me. Thank you.

Tiffany Sy: Thank you.

Thank you. Thank you.

Conference Operator: Again, if you have a question, please press star then one. The next question comes from John Lasoka with eReilly Securities. Please go ahead.

again, if you have a question, please press star then 1

The next question comes from John loka with B Riley Securities. Please go ahead.

John LaSoka: Good morning.

Good morning.

Yael Duffy: Good morning.

John LaSoka: So maybe kind of, yeah, that's okay. So maybe thinking about potential refinancing for the $1.4 billion of kind of floating rate cap debt, is there anything you're looking for in terms of the performance of the Mountain JV portfolio that, you know, might make that more attractive, might kind of accelerate the timing of, you know, kind of completing a refinancing there? And just, you know, maybe what were you kind of seeing in the market or what were you kind of seeing with the wholly owned portfolio that made closing that refinancing in June, you know, the right time, the right kind of period to, you know, the right pricing, etc., to be doing that transaction?

Good morning to maybe kind of. Yeah. Like um, so maybe thinking about, uh, potential refinancing for the 1.4 billion dollars of kind of floating rate cap debt. Is there anything you're looking for, in terms of the performance of the mountain JV portfolio? That you know might make that more attractive might kind of accelerate the timing of, you know, uh, kind of completing, um, a refinancing their and just, you know, maybe what were you kind of seeing in the market? Or were you kind of seeing with the wholly owned, portfolio that made?

Closing that refinancing in June, you know, the right time, the right kind of period, to be able to write pricing Etc, to to be doing that transaction.

Tiffany Sy: I think the refinancing, excuse me, refinancing on the $1.235 billion, there was more of a, that one had a higher interest rate. And so that seemed to make the most sense in order of refinancing in terms of timing. You know, we still have one-year option extension left on the Mountain loan, so we have time to evaluate that. But certainly, if something attractive presents itself at the right rate and right maturity, you know, all of those factors, then, you know, we would execute on that.

I think the refinancing excuse me, refinancing on the 1.235 billion. Um,

There was more of a that that 1 had a higher interest rate and so um that seemed to make them the most sense in order of refinancing in terms of timing um you know we still have 1 year option extension left on on the mountain loans. So we have time to evaluate that but certainly if something attractive presents itself at the, at the right rate and right maturity,

um, you know, all of those doctors and you know, we would

Yael Duffy: Yeah. And I guess I'd just add too, John, that, I mean, the Mountain JV or the Mountain portfolio right now, we're at almost 100% occupied. So there really isn't anything additional that we need to do from an operational or leasing perspective to get it primed. Again, it's just, as Tiffany mentioned, it's really timing and, you know, it's a big endeavor to go through a refinancing. So we kind of take one at a time.

execute on that. Yeah. And I guess I just add to John that, I mean, the mountain JV or the mountain portfolio right now we're at almost 100% occupied. So there really isn't anything additional that we need to do from a operational or leasing perspective to get it primed. Um again it's just as Tiffany mentioned it was really timing and you know it's a big Endeavor to go through a refinancing so we kind of take 1 at a time.

John LaSoka: I mean, is there any thought that you want to see maybe some of that 2026 lease renewal before and see how kind of, you know, where, I guess, rent bumps are going to go? Or is that something where, you know, the portfolio kind of is where it is in terms of how you're going to present it to the banking group as you think about refinancing?

I mean, is there any thought that you want to see maybe some of that 2026 lease renewal before and see how kind of...

Um, you know, where I guess rent bumps are going to go. Or is that something where?

Um, you know, the portfolio kind of is where it is in terms of how you're going to present it to to the banking group. As you think about refinancing

Yael Duffy: Yeah. There isn't anything material within that Mountain portfolio in terms of 2026 lease expirations. You know, we only have, within all of ILPT, we only have 4.4% of our annualized revenue expiring in '26. So it isn't material and even less so for Mountain.

John LaSoka: Okay. And then thinking about the wholly owned portfolio, I know, you know, things can vary quarter to quarter, but the gap leasing spreads on kind of the Hawaiian new leases in the Hawaiian portfolio were a little bit below the kind of 30% target that you put out there or kind of mark-to-market that you kind of are thinking about within the portfolio. Was there anything specific driving that? Or is it just, hey, it's, you know, bespoke in the current quarter and then we may outperform next quarter, etc.?

Yeah, there isn't anything material within that mountain portfolio. Um, in terms of 2026, we expirations, you know, we only have within all of ilpt, we only have 4.4% of our annualized Revenue expiring in 26, so it isn't material and even less. So, for mountains.

And then, thinking about the whole young portfolio, I know, you know, things can vary quarter to quarter, but the um, Gap leasing spreads on kind of the Hawaiian, uh, new leases in. The Hawaiian portfolio were a little bit below the kind of 30% Target that you put out there or kind of Mark to Market. You kind of are thinking about within the portfolio. Is there anything specific driving that um or is it just hey it's you know,

Spoken to current quarter. And we may outperform next quarter, Etc.

Yael Duffy: Yeah. So for, I mean, if we're to break it out between new leasing and renewals, I mean, our new leasing, we had almost over 83% roll-up in rent across two leases. And then for the renewals, it was hovered around 11%. And I would say really what was driving that is most of those renewals were on our space leases versus our ground leases. And so just as, you know, it's a little bit nuanced because those are generally smaller tenants, you know, anywhere from, you know, 1,500 to 6,000 square feet. And it's more traditional as to how you would think of office leasing versus ground leasing. So that's really just the nuance of it.

Yeah, so for, I mean, if we're, if we're to break it out between, uh, new Leasing and renewals, I mean, our new leasing, we had almost over 83%, roll up in rent, um, across 2 leases and then for the renewals, um, it was hovered around 11% and I would say, really, what was driving? That is, most of those renewals were on our space, leases versus our ground leases. And so, just as you know, it's a little bit nuanced because those are generally smaller, um, tenants, you know, anywhere from, you know, 1500 to 6,000 square feet. And it's more traditional as how you would think of office leasing versus ground Leasing.

John LaSoka: Okay. That makes sense. And anything notable, you know, in terms of the lease up of vacant assets, just notably the Hawaii land parcel in Indianapolis and the kind of moving pieces there that have changed since last quarter?

So that's really the Nuance of it.

Okay. That makes sense. And anything um notable you know, in terms of the lease up of of vacant assets, just notably the the Hawaii land parcel in in Indianapolis, any kind of moving pieces there.

Yael Duffy: Yeah. So nothing material. I will say I think we've been seeing a little more activity on our Indiana property in the last several weeks. I think we have three active prospects in Hawaii. It's pretty much status quo. Again, that property is a lot for somebody to underwrite in terms of all the work that needs to be done there. So it's just, it's slow.

They've changed since the last quarter. Yeah, so,

John LaSoka: Okay. That's it for me. Thank you very much.

Nothing material. I will say, I think we've been seeing a little more activity on our Indiana um, property in the last several weeks. Um, I think we have 3, active prospects and Hawaii, it's pretty much status quo. Again that property is a lot for somebody to um underwrite in terms of all the work that needs to be done there. So it's just it's slow.

Um, uh that's for me. Thank you very much.

Yael Duffy: Thanks, John. Thank you.

Thanks John. Thank you.

Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to Yael Duffy, president and chief executive, excuse me, chief operating officer, for any closing remarks.

This concludes our question and answer session. I would like to turn the conference back over to guile.

Duffy, President and Chief Executive Officer, excuse me, Chief Operating Officer, for any closing remarks.

Yael Duffy: Thanks for joining today's call. Please reach out to investor relations if you're interested in scheduling a meeting with us. Operator, that concludes our call. Thank you.

Conference Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Thanks for joining today's call. Please reach out to investor relations. If you're interested in scheduling a meeting with us, operator that concludes our call. Thank you.

The conference has now concluded, thank you for attending today's presentation. You may now disconnect